In a win for the transgender community in late 2016, the North Carolina State Health Plan (State Plan), removed the exclusion of gender-affirming healthcare: Transition-related care was covered in the 2017 health plans. However, following the election of a new State Treasurer, the State Plan reinstated the exclusion in 2018 and cut off certain insurance benefits for transgender individuals, allowing the State Plan’s coverage for transition-related care to expire. The move violated federal anti-discrimination policies.
To challenge the State Plan’s new stance on gender-affirming healthcare, civil rights organizations Lambda Legal and Transgender Legal Defense & Education Fund (TLDEF) filed a lawsuit on behalf of a group of transgender individuals and parents of transgender minors.
At Lambda Legal’s and TLDEF’s request, a cross-office McDermott pro bono team—including Michael Stanek, Dmitriy Tishyevich, Warren Haskel and Lauren Evans—represented the plaintiffs in the case, current and former state employees and their children who were denied coverage for gender-affirming healthcare under the State Plan. The team served as co-counsel alongside lawyers from another firm.
After a long-fought legal battle that included more than 20 depositions and five Daubert motions, the Court granted summary judgment in favor of the plaintiffs and agreed the State Plan’s exclusion of transition-related healthcare coverage was discriminatory and unlawful. It ordered the State Plan “to reinstate coverage for medically necessary services for the treatment of gender dysphoria.”
Specifically, the Court ruled that the State Plan and North Carolina state employers unlawfully discriminated based on sex and transgender status, in violation of the Constitution’s Equal Protection Clause and Title VII of the Civil Rights Act of 1964. The Court reserved a ruling on the issue of plaintiffs’ claims under the healthcare nondiscrimination law, known as Section 1557 of the Affordable Care Act, pending rulemaking by the US Department of Health and Human Services under the Biden Administration.
The ruling reinforces the Supreme Court’s 2020 Bostock decision, which held that discrimination based on sexual orientation and gender identity violates Title VII of the Civil Rights Act of 1964.
The combination of the McDermott team and co-counsel’s legal skill and resources, paired with Lambda Legal’s deep understanding of transgender medical issues, set up the victory.
In its defense, the State Plan raised the question of whether transition-related healthcare is medically necessary, and whether the state should be expected to pay for it. The plaintiffs’ legal team quickly dismantled the budget argument: Transition-related care accounts for significantly less than one percent of the State Plan’s annual budget.
On the question of medical necessity, the team built their strategy around a foundational insight: The State Plan’s “experts” were not really experts in transgender healthcare. Their expert surgeon had never treated a transgender patient. Another expert put forth personal opinions based on research, but he had no direct experience with transgender medical issues. The team took advantage of these weaknesses by designing depositions to elicit certain facts and opinions that demonstrated the experts’ knowledge gaps. After filing summary judgment, the team filed Daubert motions to challenge the State Plan’s experts using material from the depositions, a strategy that worked in their favor. In her summary judgment opinion, the judge dealt with the Daubert motions first, acknowledging that the State Plan relied on experts who could not provide relevant opinions.
Lambda Legal Senior Counsel Tara Borelli said, “McDermott Will & Emery was an essential partner in this victory. The team contributed to every aspect of the case, and the high caliber of their lawyering and strategic thinking significantly shaped the excellent result. Their collaborative approach throughout the case has made them a joy to work with.”
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